September 3, 2008

Recently, we at NPRI reported that millions of taxpayer dollars are spent by local governments in Nevada each year to lobby the state government. One commentary touched on the millions spent lobbying the federal government, but now additional research has revealed that millions more in Nevada taxpayer dollars are going to Washington, D.C., each year, lining the pockets of already wealthy lobbyists.

Just how much money sloshes around the world of special interests? A total is difficult to estimate given the large sums that are likely exchanged under the table, but the wife of one lobbyist recently revealed in an interview that her house is so large that she can’t remember the number of rooms, but she does have one room devoted to wrapping gifts in sheets of money that she purchases from the US Bureau of Engraving.

Needless to say, these special interests have enough money to buy and sell many politicians. By now, we’ve all heard the story of Congressman Duke Cunningham, who was bribed with a Rolls Royce, a yacht, a Louis-Phillipe commode, three antique nightstands, a leaded glass cabinet, a washstand, a buffet, four armoires, free auto repair services when his Rolls broke down, and numerous trips on private jets. In exchange, Cunningham directed Defense Department contracts to these people at great expense to the taxpayers.

Few citizens know that lobbying is not just a matter of wealthy individuals and firms spending millions to influence the government. Actually, varied levels of government hire lobbyists to influence other levels of government. While NPRI recently reported that local and state governments in Nevada spent $4.9 million to lobby the federal government, additional research has uncovered that no less than $25.4 million in taxpayer dollars has been spent by governments in Nevada to lobby the federal government since 1999. This is in addition to the $10.8 million, at least, spent by local governments to lobby the state government.

The biggest spender on lobbying was the Nevada Department of Transportation, which has spent close to $2 million since 1999. The City of Las Vegas, the City of Henderson, and the University of Nevada at Reno also each spent close to that amount over the same time period. The City of Mesquite, the City of North Las Vegas, UNLV, the State of Nevada, and the Las Vegas Valley Water District all spent more than $1 million lobbying in the last decade, and some very small government entities such as Nye County spent as much as close to half a million taxpayer dollars on lobbying.

In terms of the big winners on the lobbyist end, a Marcus G. Faust (what a name) made or shared $6,573,595 from Nevada taxpayers to lobby the federal government since 1999. The Carmen Group made $2.5 million off of Nevada’s taxpayers, the Furman Group made $1.9 million, Ball Janik made the better part of $1.7 million, and Cassidy and Associates made $1.4 million. It is also worth noting that these numbers are generally based on government entities’ self-reporting. However telephone conversations with several government entities in Nevada established that many of them do not keep records on the amounts they spend in this category. Thus, just how many millions more may have been squandered is unknown.

While these lobbyists make millions, the taxpayers get little or nothing in return. As mentioned in a previous commentary, the State of Nevada ranks 49th in receipt of federal aid to state and local governments per capita and 50th in federal spending per capita. Further, for each dollar that Nevadans send to Washington, D.C., the federal government returns only 73 cents. Needless to say, the state could spend no taxpayer money on lobbying whatsoever and still rank 50th in federal spending per capita, but then our lobbyist friends in D.C. might have fewer sheets of our money for wrapping their gifts.

Serious reform is needed in the area of intergovernmental lobbying. All levels of government should be required to record and report the amount of money that they spend on lobbying. The state should also develop some method of punishing the government entities and agencies that do not report their lobbying. The current penalty is just $10 per day not reported, which — given the millions of dollars being spent — is a pittance. It’s no wonder that a state analyst, speaking with NPRI, called the lack of compliance- accountability mechanisms “very frustrating.”

Much more detail should be provided on how lobbying money was spent. Current lobbying reporting forms have entries for “gifts and entertainment,” but, given the thousands being spent in these categories, taxpayers deserve to know exactly what gifts and entertainment their money is being used for.

At a time when taxpayers are feeling the pinch of a slowing economy, and state government is facing budget cuts across the board, state lawmakers will be irresponsible if they fail to impose greater discipline over frivolous expenses.

By the numbers, intergovernmental lobbying may well be the most frivolous expense occurring.